Document_And_Entity_Informatio
Document And Entity Information | 6 Months Ended | |
Jun. 30, 2014 | Aug. 13, 2014 | |
Document Information [Line Items] | ' | ' |
Entity Registrant Name | 'BAXANO SURGICAL, INC. | ' |
Entity Central Index Key | '0001230355 | ' |
Current Fiscal Year End Date | '--12-31 | ' |
Entity Filer Category | 'Smaller Reporting Company | ' |
Trading Symbol | 'BAXS | ' |
Entity Common Stock, Shares Outstanding | ' | 49,725,413 |
Document Type | '10-Q | ' |
Amendment Flag | 'false | ' |
Document Period End Date | 30-Jun-14 | ' |
Document Fiscal Period Focus | 'Q2 | ' |
Document Fiscal Year Focus | '2014 | ' |
Condensed_Consolidated_Stateme
Condensed Consolidated Statements of Operations and Comprehensive Loss (USD $) | 3 Months Ended | 6 Months Ended | ||
In Thousands, except Per Share data, unless otherwise specified | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 |
Revenue | $4,656 | $3,877 | $9,068 | $6,977 |
Cost of revenue | 1,417 | 1,295 | 2,680 | 2,327 |
Gross profit | 3,239 | 2,582 | 6,388 | 4,650 |
Operating expenses: | ' | ' | ' | ' |
Research and development | 2,465 | 1,509 | 4,452 | 2,794 |
Sales and marketing | 6,001 | 6,032 | 13,275 | 10,959 |
General and administrative | 2,567 | 1,860 | 5,115 | 3,411 |
Merger and integration expenses | 0 | 1,583 | 19 | 2,895 |
Total operating expenses | 11,033 | 11,053 | 22,861 | 20,219 |
Operating loss | -7,794 | -8,471 | -16,473 | -15,569 |
Non-operating items: | ' | ' | ' | ' |
Interest expense | -759 | -73 | -1,135 | -73 |
Change in fair value of derivative and warrant liabilities | 2,676 | 0 | 2,624 | 0 |
Other income, net | 10 | 13 | 8 | 11 |
Net loss | -5,867 | -8,531 | -14,976 | -15,631 |
Other comprehensive income (loss): | ' | ' | ' | ' |
Foreign currency translation adjustments | -1 | 1 | -2 | 0 |
Comprehensive loss | -5,868 | -8,530 | -14,978 | -15,631 |
Net loss per common share - basic and diluted (in dollars Per Share) | ($0.12) | ($0.26) | ($0.31) | ($0.51) |
Weighted average common shares outstanding - basic and diluted (in shares) | 48,520 | 33,408 | 47,793 | 30,379 |
US Treasury and Government [Member] | ' | ' | ' | ' |
Operating expenses: | ' | ' | ' | ' |
Charges related to U.S. Government settlement | $0 | $69 | $0 | $160 |
Condensed_Consolidated_Balance
Condensed Consolidated Balance Sheets (USD $) | Jun. 30, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Current assets: | ' | ' |
Cash and cash equivalents | $2,326 | $8,540 |
Restricted cash | 569 | 610 |
Accounts receivable, net of allowances of $747 and $832, respectively | 3,754 | 4,699 |
Inventory | 7,181 | 7,037 |
Prepaid expenses and other assets | 720 | 475 |
Total current assets | 14,550 | 21,361 |
Property and equipment, net | 2,574 | 3,047 |
Goodwill | 8,463 | 8,463 |
Intangible assets, net | 14,765 | 15,530 |
Other long-term assets | 1,851 | 577 |
Total assets | 42,203 | 48,978 |
Current liabilities: | ' | ' |
Accounts payable | 2,858 | 3,693 |
Accrued expenses | 3,108 | 3,593 |
Current portion of long-term debt | 1,940 | 563 |
Common stock warrant liability associated with convertible notes | 1,454 | 0 |
Derivative liabilities associated with convertible notes | 938 | 0 |
Total current liabilities | 13,062 | 10,585 |
Credit facility, net of current portion and discount | 5,043 | 6,268 |
Convertible notes, net of discount | 5,470 | 0 |
Common stock warrant liability associated with credit facility | 226 | 528 |
Other noncurrent liabilities | 751 | 2,150 |
Commitments and contingencies (Note 6) | ' | ' |
Stockholders' equity: | ' | ' |
Preferred stock, $0.0001 par value; 5,000,000 shares authorized, none issued and outstanding at June 30, 2014 and December 31, 2013 | 0 | 0 |
Common stock, $0.0001 par value; 150,000,000 shares authorized, 48,659,826 shares issued and outstanding at June 30, 2014; 75,000,000 shares authorized, 46,156,921 shares issued and outstanding at December 31, 2013 | 5 | 5 |
Additional paid-in capital | 203,442 | 200,260 |
Accumulated other comprehensive income | 13 | 15 |
Accumulated deficit | -185,809 | -170,833 |
Total stockholders' equity | 17,651 | 29,447 |
Total liabilities and stockholders' equity | 42,203 | 48,978 |
US Treasury and Government [Member] | ' | ' |
Current liabilities: | ' | ' |
Accrued expenses | $2,764 | $2,736 |
Condensed_Consolidated_Balance1
Condensed Consolidated Balance Sheets [Parenthetical] (USD $) | Jun. 30, 2014 | Dec. 31, 2013 |
In Thousands, except Share data, unless otherwise specified | ||
Accounts receivable, net of allowances (in dollars) | $747 | $832 |
Preferred stock, par value (in dollars per share) | $0.00 | $0.00 |
Preferred Stock, Shares Authorized | 5,000,000 | 5,000,000 |
Preferred Stock, Shares Issued | 0 | 0 |
Preferred Stock, Shares Outstanding | 0 | 0 |
Common stock, par value (in dollars per share) | $0.00 | $0.00 |
Common stock, shares authorized | 150,000,000 | 75,000,000 |
Common stock, shares issued | 48,659,826 | 46,156,921 |
Common stock, shares outstanding | 48,659,826 | 46,156,921 |
Condensed_Consolidated_Stateme1
Condensed Consolidated Statements of Cash Flows (USD $) | 6 Months Ended | |
In Thousands, unless otherwise specified | Jun. 30, 2014 | Jun. 30, 2013 |
Cash flows from operating activities: | ' | ' |
Net loss | ($14,976) | ($15,631) |
Adjustments to reconcile net loss to net cash used in operating activities | ' | ' |
Depreciation and amortization | 1,745 | 817 |
Stock-based compensation | 669 | 620 |
Provision for bad debts | 19 | 32 |
Change in fair value of derivative and warrant liabilities | -2,624 | 0 |
Amortization of debt discount and deferred financing fees | 485 | 0 |
Loss on sale of fixed assets | 2 | 0 |
Changes in operating assets and liabilities: | ' | ' |
Decrease in accounts receivable | 926 | 451 |
(Increase) decrease in inventory | -144 | 91 |
Increase in prepaid expenses | -245 | -270 |
Decrease in accounts payable and accrued expenses | -1,372 | -1,146 |
Net cash used in operating activities | -16,886 | -15,663 |
Cash flows from investing activities: | ' | ' |
Purchases of property and equipment | -508 | -612 |
Acquisition, net of cash received | 0 | -2,685 |
Restricted cash classification | 41 | -62 |
Net cash used in investing activities | -467 | -3,359 |
Cash flows from financing activities: | ' | ' |
Proceeds from convertible notes | 9,994 | 0 |
Payment of convertible notes issue costs | -1,407 | 0 |
Net proceeds from issuance of common stock | 2,506 | 17,074 |
Proceeds from employee stock plans | 48 | 10 |
Net cash provided by financing activities | 11,141 | 17,084 |
Effect of exchange rate changes on cash and cash equivalents | -2 | -1 |
Net decrease in cash and cash equivalents | -6,214 | -1,939 |
Cash and cash equivalents, beginning of period | 8,540 | 21,541 |
Cash and cash equivalents, end of period | 2,326 | 19,602 |
US Treasury and Government [Member] | ' | ' |
Changes in operating assets and liabilities: | ' | ' |
Decrease in accrued expenses related to U.S. Government settlement | ($1,371) | ($627) |
Organization
Organization | 6 Months Ended | |
Jun. 30, 2014 | ||
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ' | |
Organization, Consolidation and Presentation of Financial Statements Disclosure and Significant Accounting Policies [Text Block] | ' | |
1 | Organization | |
Baxano Surgical, Inc. (“we” or the “Company”) is a medical device company focused on designing, developing and marketing minimally invasive products to treat degenerative conditions of the spine affecting the lumbar region. We are passionately committed to delivering innovative technologies to our surgeon customers that benefit their patients. On May 31, 2013, we, through our wholly-owned subsidiary Racer X Acquisition Corp. (“Merger Sub”), consummated our acquisition of Baxano, Inc. (“Baxano”) pursuant to an Agreement and Plan of Merger (the “Merger Agreement”). Under the terms of the Merger Agreement, Merger Sub merged with and into Baxano, with Baxano remaining as the surviving corporation and as a wholly-owned subsidiary of the Company (the “Merger”). Immediately following the closing of the Merger on May 31, 2013, we changed our name to Baxano Surgical, Inc. in connection with the merger of this wholly-owned subsidiary with and into the Company. Our condensed consolidated statements of operations reflect the Baxano results, including the iO-Flex ® and iO-Tome ® products, from the Merger date, May 31, 2013. | ||
We currently market the AxiaLIF® family of products for single and two level lower lumbar fusion, the VEO® lateral access and interbody fusion system, iO-Flex, a proprietary set of flexible instruments used by surgeons during spinal decompression procedures, iO-Tome instrument, which rapidly and precisely removes bone, specifically the facet joints, which is commonly performed in spinal fusion procedures and Avance™, an MIS pedicle screw system used in lumbar spinal fusion procedures. We also market other products that complement these primary offerings, including our Vectre™ facet screw system, Bi-Ostetic™ bone void filler, bowel retractors, discectomy tools, and a bone graft harvesting system that can be used to extract bone graft from the patient’s hip for use in fusion procedures. We currently sell our products through a direct sales force, independent sales agents and distributors. | ||
Summary_of_Significant_Account
Summary of Significant Accounting Policies | 6 Months Ended | |||||||||||||
Jun. 30, 2014 | ||||||||||||||
Accounting Policies [Abstract] | ' | |||||||||||||
Significant Accounting Policies [Text Block] | ' | |||||||||||||
2 | Summary of Significant Accounting Policies | |||||||||||||
Basis of Presentation | ||||||||||||||
We have prepared the accompanying unaudited interim condensed consolidated financial statements in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial statements and with the instructions to Form 10-Q and Article 10 of Regulation S-X issued by the Securities and Exchange Commission (“SEC”). Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. GAAP have been condensed or omitted pursuant to such SEC rules and regulations. The accompanying unaudited interim condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2013 filed with the SEC on March 10, 2014 (“2013 Form 10-K”). The Company’s historical results are not necessarily indicative of future operating results, and the results for the three and six months ended June 30, 2014 are not necessarily indicative of results to be expected for the full year or for any other period. | ||||||||||||||
In our opinion, the accompanying unaudited interim condensed consolidated financial statements have been prepared on the same basis as our annual audited consolidated financial statements and contain all material adjustments (consisting of normal recurring accruals and adjustments) which are, in the opinion of Company’s management necessary to present fairly our financial condition, results of operations, and cash flows for the periods presented. These principles require management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. The principal estimates relate to accounts receivable reserves, inventory valuation, valuation of stock-based compensation, accrued expenses, deferred tax asset valuation reserves, and the valuation of embedded derivatives and warrants for common stock. Actual results could differ from those estimates. The condensed consolidated balance sheet that we have presented as of December 31, 2013 has been derived from the audited consolidated financial statements on that date, but does not include all of the information and footnotes required by U.S. GAAP for complete financial statements. | ||||||||||||||
Our financial statements are prepared on the basis that our business will continue as a going concern in accordance with U.S. GAAP. This basis of presentation assumes that we will continue in operation for the foreseeable future and will be able to realize our assets and discharge our liabilities and commitments in the normal course of business. However, our independent registered public accounting firm has indicated in its audit report on our fiscal 2013 financial statements, included in our 2013 Form 10-K, that our recurring losses and negative cash flows from operations raise substantial doubt about our ability to continue as a going concern. The financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or amounts of liabilities that might result from the outcome of this uncertainty. | ||||||||||||||
At June 30, 2014, our principal sources of liquidity consisted of cash and cash equivalents of $2.3 million and accounts receivable, net of $3.8 million. Our ability to fund our cash and future liquidity requirements is dependent on our ability to raise additional capital, increase revenues, maintain our relationships with certain vendors, successfully avoid an event of default under our debt agreements, maintain tight controls over spending and attain our other business objectives on a timely basis. To meet our capital needs, we are actively pursuing multiple alternatives to raise additional funds, including additional debt or equity financings and other sources of funding. If we are unable to obtain the necessary capital from cash flows from operations and the infusion of additional capital to fund our operations in the near term, we will need to implement further expense reduction measures, including workforce reductions, the consolidation of operations and/or the delay or cancellation of certain operational programs, pursue a plan to license or sell our assets, or to cease operations. Please refer to “—Liquidity and Capital Resources” in the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” section of this Form 10-Q for a discussion of our cash requirements and efforts to obtain additional capital. | ||||||||||||||
Significant Accounting Policies | ||||||||||||||
A detailed description of our significant accounting policies is presented in the footnotes to our annual audited consolidated financial statements included in our 2013 Form 10-K. Our significant accounting policies, estimates, and assumptions have not changed materially since December 31, 2013, except for those related to our 2014 convertible notes. Additional information regarding the convertible notes can be found in Note 5, “Credit Facility, Convertible Notes and Common Stock Warrants.” | ||||||||||||||
Inventory | ||||||||||||||
The following table presents the components of inventory (in thousands): | ||||||||||||||
June 30, | December 31, | |||||||||||||
2014 | 2013 | |||||||||||||
Finished goods | $ | 4,887 | $ | 4,607 | ||||||||||
Raw materials | 1,600 | 1,584 | ||||||||||||
Work-in-process | 694 | 846 | ||||||||||||
Total inventories, net | $ | 7,181 | $ | 7,037 | ||||||||||
Segment and Geographic Reporting | ||||||||||||||
We apply the relevant guidance which establishes standards for the reporting by business enterprises of information about operating segments, products and services, geographic areas, and major customers. We have determined that we did not have any separately reportable segments. All our products provide surgical treatment for the lumbar region of the spine. Long-lived assets are primarily located in the United States. | ||||||||||||||
The following table summarizes revenue by geographic area (in thousands): | ||||||||||||||
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||
United States | $ | 4,482 | $ | 3,687 | $ | 8,745 | $ | 6,281 | ||||||
Europe | 151 | 176 | 244 | 659 | ||||||||||
Asia | 23 | 14 | 79 | 37 | ||||||||||
$ | 4,656 | $ | 3,877 | $ | 9,068 | $ | 6,977 | |||||||
Net Loss per Common Share | ||||||||||||||
We calculate basic earnings per share based upon the weighted average number of common shares outstanding. We calculate diluted earnings per share based upon the weighted average number of common shares outstanding plus the dilutive effect of common share equivalents calculated using the treasury stock method. Our potential dilutive common shares, which consist of shares issuable upon the exercise of stock options, restricted stock units, warrants and conversion of notes, have not been included in the computation of diluted net loss per common share for all periods as the result would be anti-dilutive. The following table sets forth the potential shares of common stock that are not included in the calculation of diluted net loss per share as the result would be anti-dilutive as of the end of each period presented: | ||||||||||||||
Three Months Ended | Six Months Ended | |||||||||||||
June 30, | June 30, | |||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||
Weighted average stock options and restricted stock units outstanding | 6,089,502 | 4,093,296 | 5,773,266 | 3,702,905 | ||||||||||
Common stock warrants related to credit facility | 882,353 | - | 882,353 | - | ||||||||||
Common stock warrants related to convertible notes | 7,252,308 | - | 3,646,188 | - | ||||||||||
Recently Issued Accounting Standards | ||||||||||||||
In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update 2014-09, Revenue from Contracts with Customers (“ASU 2014-09”). The FASB issued ASU 2014-09 to clarify the principles for recognizing revenue and to develop a common revenue standard for U.S. GAAP and International Financial Reporting Standards. The standard outlines a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and supersedes the most current revenue recognition guidance. This guidance is effective for fiscal years and interim periods within those years beginning after December 15, 2016. We are currently evaluating the impact that the implementation of this standard will have on our consolidated financial statements. | ||||||||||||||
Merger
Merger | 6 Months Ended | |||||||
Jun. 30, 2014 | ||||||||
Business Combinations [Abstract] | ' | |||||||
Business Combination Disclosure [Text Block] | ' | |||||||
3 | Merger | |||||||
On May 31, 2013, we, through our wholly-owned subsidiary Merger Sub, consummated our acquisition of Baxano (the “Merger”) pursuant to the Merger Agreement. Additional information regarding the Merger can be found in Note 3, “Merger and Financing Transaction,” of the footnotes to our annual audited consolidated financial statements included in our 2013 Form 10-K. | ||||||||
The results of operations of Baxano have been included in our condensed consolidated financial statements from the date of the acquisition. The following pro forma results of operations assume the acquisition of Baxano occurred on January 1, 2013. The pro forma results for the three and six months ended June 30, 2013 presented below reflect our historical data and the historical data of the Baxano business adjusted for amortization of intangibles, interest costs associated with Baxano preferred stock and convertible debt, and elimination of intercompany general and administrative expenses. The pro forma results of operations presented below may not be indicative of the results we would have achieved had we completed the acquisition on January 1, 2013, or that we may achieve in the future. | ||||||||
The following table presents the pro forma results (in thousands, except per share data): | ||||||||
June 30, 2013 | ||||||||
Three Months | Six Months | |||||||
Ended | Ended | |||||||
Revenue | $ | 5,650 | $ | 11,702 | ||||
Operating loss | $ | -12,099 | $ | -23,514 | ||||
Net loss | $ | -12,230 | $ | -23,730 | ||||
Net loss per common share | $ | -0.27 | $ | -0.53 | ||||
Goodwill_and_Intangible_Assets
Goodwill and Intangible Assets | 6 Months Ended | ||||||
Jun. 30, 2014 | |||||||
Goodwill and Intangible Assets Disclosure [Abstract] | ' | ||||||
Goodwill and Intangible Assets Disclosure [Text Block] | ' | ||||||
4 | Goodwill and Intangible Assets | ||||||
The goodwill and intangible assets amounts as of June 30, 2014 and December 31, 2013, were recorded as part of the purchase price allocation for the Merger. The carrying amount of goodwill as of December 31, 2013 was $8.5 million and unchanged during the three and six months ended June 30, 2014. Amortization expense for finite-lived intangible assets for the three and six months ended June 30, 2014 was $0.5 million and $0.8 million, respectively. | |||||||
Intangible assets as of June 30, 2014 consisted of the following (in thousands): | |||||||
Amortization | |||||||
Period (Years) | |||||||
Trademark | $ | 830 | Indefinite | ||||
Product trademarks | 1,530 | 15-17 | |||||
Technology | 13,001 | 15-17 | |||||
Customer relationships | 475 | 10 | |||||
15,836 | |||||||
Less: accumulated amortization | -1,071 | ||||||
$ | 14,765 | ||||||
Goodwill and trademarks are tested annually for impairment and between annual tests if an event occurs or circumstances change that would more likely than not reduce the fair value of our outstanding common stock below our net equity carrying amount. All other intangible assets are assessed for reviewed for impairment whenever events or circumstances indicate the carrying amount of an asset may not be fully recoverable. Should our stock price continue to decline, or other impairment indicators occur, we may have to perform an impairment assessment of our intangible assets at an interim date and prior to our required assessment at year-end for goodwill and trademark . | |||||||
Credit_Facility_Convertible_No
Credit Facility, Convertible Notes and Common Stock Warrants | 6 Months Ended | ||||||||||||
Jun. 30, 2014 | |||||||||||||
Debt Disclosure [Abstract] | ' | ||||||||||||
Long-term Debt [Text Block] | ' | ||||||||||||
5 | Credit Facility, Convertible Notes and Common Stock Warrants | ||||||||||||
Credit Facility with Hercules Technology Growth Capital, Inc. | |||||||||||||
On December 3, 2013 (the “Credit Facility Closing Date”), we obtained a credit facility of up to $15.0 million (the “Credit Facility”) from Hercules Technology Growth Capital, Inc., a Maryland corporation (“Hercules”). The Credit Facility is governed by a loan and security agreement, dated December 3, 2013 (the “Loan Agreement”), which provides for up to three separate advances, with the first advance of $7.5 million available at closing. The availability of the second advance of $2.5 million was dependent upon our achieving $6.0 million in gross commercial revenue for the fourth quarter of our 2013 fiscal year. The availability of the third advance of $5.0 million was dependent upon our achieving $7.0 million in gross commercial revenue for the first quarter of our 2014 fiscal year and net proceeds of at least $15.0 million from sales of our equity securities on or before June 15, 2014. We did not achieve the requirements to draw the second or third advances. | |||||||||||||
The following table presents the components of the Credit Facility (in thousands): | |||||||||||||
June 30, | December 31, | ||||||||||||
2014 | 2013 | ||||||||||||
Advance | $ | 7,500 | $ | 7,500 | |||||||||
Final payment | 263 | 263 | |||||||||||
Debt discounts, including common stock warrant | -780 | -932 | |||||||||||
Total long-term debt | 6,983 | 6,831 | |||||||||||
Less: Current portion of long-term debt | -1,940 | -563 | |||||||||||
Total long-term debt, net of current portion | $ | 5,043 | $ | 6,268 | |||||||||
The Credit Facility has a term of 39 months and accrues interest at a rate equal to the prime rate plus 7.75% (with the prime rate subject to a floor of 4.75%), calculated on an actual/360 basis and payable monthly in arrears. Amounts outstanding during an event of default accrue interest at a rate of 3% in excess of the above rate, and past due amounts are subject to a 5% late charge. Outstanding principal will amortize in the 30-month period preceding maturity, payable in equal installments of principal and interest (subject to recalculation upon a change in prime rates). Any advance may be prepaid in whole or in part at any time, subject to a prepayment fee of 1-2% if prepaid more than one year after closing. In addition, a fee equal to 3.50% of all advances made under the Credit Facility will be payable upon the final principal payment or prepayment in full of the advances. The Credit Facility is secured by a lien on substantially all of our assets. | |||||||||||||
The Loan Agreement contains customary covenants and representations, including a financial reporting covenant and limitations on cash dividends, distributions, debt, contingent obligations, liens, loans, investments, mergers, acquisitions, divestitures, subsidiaries, and changes in control. We are not allowed to declare or pay any cash dividends or make cash distributions on any class of stock or other equity interest, except that our subsidiary may pay dividends or make distributions up to Baxano Surgical. There are no financial covenants. Prior to the maturity of the Credit Facility, Hercules will also have the right to participate on the same terms as other participants in certain types of our broadly marketed equity financings. | |||||||||||||
The events of default under the Loan Agreement include, without limitation, (1) a material adverse change in our ability to perform our obligations under the Loan Agreement, or in the value of our collateral, and (2) an event of default under any other of our indebtedness in excess of $150,000. If an event of default occurs, Hercules is entitled to take enforcement action, including acceleration of amounts due under the Loan Agreement. The Loan Agreement also contains other customary provisions, such as expense reimbursement and confidentiality. Hercules has indemnification rights and the right to assign the Credit Facility. | |||||||||||||
The estimated fair value of the debt (categorized as a Level 2 liability for fair value measurement purposes) is determined using current market factors and our ability to obtain debt at comparable terms to those that are currently in place. We believe the estimated fair value at June 30, 2014 and December 31, 2013 approximates the carrying amount. | |||||||||||||
In connection with the Credit Facility, we issued to Hercules a warrant to purchase shares of our common stock (the “Warrant”). The Warrant consists of two tranches, the first tranche issued at closing and the second tranche to be issued if and when Hercules makes a second advance under the Loan Agreement. The first tranche is exercisable for a number of shares of our common stock equal to $900,000 divided by the exercise price. The second tranche is exercisable for a number of shares of our common stock equal to $300,000 divided by the exercise price. We did not achieve the requirements to draw the second or third advances under the Loan Agreement and, therefore, the second tranche of the Warrant has not been issued. The exercise price is $1.02 per share initially, but is subject to downward adjustment upon our consummation of a financing at a lower effective price per share during the one-year period following the Credit Facility Closing Date. The aggregate number of shares issuable upon exercise is limited to 1,176,471. The Warrant is exercisable by Hercules in whole or in part, at any time, or from time to time, prior to the fifth anniversary of the Credit Facility Closing Date. The Warrant will be exercised automatically on a net issuance basis if not exercised prior to the expiration date. | |||||||||||||
The Warrant is considered a mark-to-market liability which is re-measured to fair value at each reporting period due to a provision whereby the exercise price of the Warrant could be decreased if we had a subsequent issue of equity instruments at a price less than $1.02 per share. We will be required to mark-to-market the fair value of the warrant liability each reporting period over the warrants term. At December 3, 2013, we recorded as a liability the initial Warrant tranche for 882,353 shares of our common stock at an estimated fair value of approximately $0.7 million with an offset to debt discount. The debt discount associated with the initial value of the Warrant is being amortized to interest expense over the term of the Credit Facility. | |||||||||||||
Convertible Notes | |||||||||||||
On March 11, 2014, we entered into a securities purchase agreement (the “Securities Purchase Agreement”) with certain institutional investors (the “Purchasers”) whereby we agreed to sell approximately $10.0 million in aggregate principal amount of subordinated convertible debentures (the “Convertible Notes”), together with warrants (the “Convertible Warrants”) to purchase 9,428,000 shares of our Common Stock in a private placement transaction (the “Private Placement Transaction”). The closing of the full amount of securities in the Private Placement Transaction was subject to stockholder approval, which was attained at our 2014 annual meeting of stockholders on April 17, 2014. The Private Placement closed on April 22, 2014 (the “Private Placement Closing Date”). | |||||||||||||
Convertible notes as of June 30, 2014 consisted of the following (in thousands): | |||||||||||||
Principal | $ | 9,994 | |||||||||||
Discounts, including common stock warrant and embedded derivative | -4,524 | ||||||||||||
Total long-term debt | 5,470 | ||||||||||||
Less: Current portion of convertible notes | - | ||||||||||||
Total convertible notes, net of current portion | $ | 5,470 | |||||||||||
The three-year Convertible Notes will be convertible into shares of Common Stock at an initial conversion price of $1.06 per share, for an aggregate of approximately 9,428,000 shares of Common Stock. The Convertible Notes bear interest at a rate of 6% per annum, payable monthly in cash or, at our discretion provided certain conditions (“Equity Conditions”) are met each payment period, in shares of Common Stock at a price equal to 90% of a calculated market price per share. In connection with the purchase of the Convertible Notes, the selling stockholders received five-year Convertible Warrants to purchase an aggregate of approximately 9,428,000 shares of Common Stock, which were exercisable immediately upon issuance at an exercise price of $1.19 per share. | |||||||||||||
The Convertible Notes are subordinated to the Credit Facility and pursuant to a subordination agreement with Hercules (the “Subordination Agreement”), cash payments by us to the Purchasers under the transaction documents related to the Private Placement Transaction are subject to a $1.5 million cap for so long as the Credit Facility remains outstanding (with any amounts in excess of that cap to be held in abeyance for the Purchasers until the Credit Facility is no longer outstanding). In connection with obtaining Hercules’ consent for the Private Placement Transaction, we paid Hercules a one-time non-refundable cash facility fee in the amount of $300,000. The Convertible Notes also contain certain cross default provisions with respect to the Credit Facility. The Convertible Notes contain no financial covenants. The Convertible Notes contain customary debt instrument covenants. Upon the occurrence of an “Event of Default,” the interest rate on the Convertible Notes increases to 15% and we can be required to redeem the Convertible Notes in whole or in part in cash at 110% of the outstanding balance. | |||||||||||||
For one year after the date of issuance, the conversion price of the Convertible Notes and the exercise price of the Convertible Warrants are subject to adjustment upon the issuance of any Common Stock or securities convertible into Common Stock below the then-existing conversion or exercise price, as applicable, subject to certain exceptions. In the event of certain change in control transactions, the holders of the Convertible Notes and Convertible Warrants will be entitled to (i) receive upon conversion or exercise the same kind and amount of securities, cash or property which the holders would have received had they converted or exercised their Convertible Notes or Convertible Warrants, as applicable, immediately prior to such transaction; and (ii) have their securities assumed by the surviving entity. In addition, if such a transaction involves cash consideration, is a going private transaction, or involves securities not listed on the NYSE or NASDAQ, the holders of the Convertible Warrants will be entitled to have their Convertible Warrants repurchased at a calculated Black-Scholes value of such Convertible Warrants at any time within 60 days after the transaction. Subject to limited exceptions, the Company will not permit the conversion of the Convertible Notes or exercise of the Convertible Warrants of any Purchaser, if after such conversion or exercise such Purchaser would beneficially own more than 4.99% of the outstanding shares of Common Stock subject to adjustment of 9.99% with 60 days’ notice by the Purchasers. | |||||||||||||
We accounted for the Convertible Notes as an instrument that has the characteristics of a debt host contract containing several embedded derivative features that would require bifurcation and separate accounting as a derivative instrument pursuant to the provisions of ASC 815. We elected not to use the fair value option to account for the Convertible Notes and embedded derivatives as one hybrid instrument. We accounted for the derivative and warrants as liabilities due to certain adjustment provisions, which requires that they be recorded at fair value. The derivative and warrant liabilities are subject to revaluation at each balance sheet date and any change in fair value will be recorded as a change in fair value in non-operating items until the earlier of expiration or its exercise at which time the liabilities will be reclassified to equity. The debt discount associated with the initial value of the derivatives and warrants will be amortized to interest expense over the term of the Convertible Notes. | |||||||||||||
The estimated fair value of the Convertible Notes (categorized as a Level 2 liability for fair value measurement purposes) is determined using current market factors and our ability to obtain debt at comparable terms to those that are currently in place. We believe the estimated fair value at June 30, 2014 approximates the carrying amount. The valuation assumptions are based on a the Convertible Debenture face amount of $10.0 million, cash coupon rate of 6%, time to maturity of 2.8 years, and a yield bond rate of 30%. | |||||||||||||
Warrants and Derivative Liabilities | |||||||||||||
Our derivative liability and common stock warrant liabilities are considered Level 3 instruments under ASC 820, Fair Value Measurements. The following table sets forth a summary of the changes in the fair value of our financial instruments (in thousands): | |||||||||||||
Derivative | Common | Common | |||||||||||
Liability | Stock Warrant | Stock Warrant | |||||||||||
Associated with | Liability | Liability | |||||||||||
Convertible | Associated with | Associated with | |||||||||||
Notes | Convertible Notes | Credit Facility | |||||||||||
Fair value as of December 31, 2013 | $ | — | $ | — | $ | 528 | |||||||
Fair value of financial instruments issued | 1,980 | 2,734 | — | ||||||||||
Change in fair value | -1,042 | -1,280 | -302 | ||||||||||
Fair value as of June 30, 2014 | $ | 938 | $ | 1,454 | $ | 226 | |||||||
We valued the warrant liability associated with the Credit Facility using the Black-Scholes-Merton option pricing model. Following is a summary of the key assumptions used to calculate the fair value of the Credit Facility Warrant: | |||||||||||||
Issuance | |||||||||||||
June 30, | December 31, | December 3, | |||||||||||
2014 | 2013 | 2013 | |||||||||||
Stock Price | $ | 0.57 | $ | 1.01 | $ | 1.18 | |||||||
Risk-free interest rate | 1.6 | % | 1.8 | % | 1.4 | % | |||||||
Expected annual dividend yield | — | % | — | % | — | % | |||||||
Expected volatility | 73.9 | % | 73.6 | % | 74.2 | % | |||||||
Term (years) | 4.4 | 4.9 | 5 | ||||||||||
We used a Monte Carlo simulation analysis to value the warrant liability associated with the Convertible Notes by modeling scenarios associated with the possible “strike price” reset provision. For the embedded derivative related to the conversion feature, as there is a conversion price reset feature, we recognized that the possible values for the Convertible Notes were path-dependent, and thus also chose to use a Monte Carlo simulation analysis to value this derivative. | |||||||||||||
Following is a summary of the key assumptions used to value the warrant liability associated with the Convertible Warrants: | |||||||||||||
Issuance | |||||||||||||
June 30, | April 22, | ||||||||||||
2014 | 2014 | ||||||||||||
Stock price | $ | 0.57 | $ | 0.97 | |||||||||
Strike price | 1.19 | 1.19 | |||||||||||
Risk-free interest rate | 1.6 | % | 1.4 | % | |||||||||
Expected annual dividend yield | — | % | — | % | |||||||||
Expected volatility | 30 | % | 30 | % | |||||||||
Term (years) | 4.8 | 5 | |||||||||||
Following is a summary of the key assumptions used to value the embedded derivatives associated with the Convertible Notes: | |||||||||||||
June 30, | Issuance | ||||||||||||
April 22, | |||||||||||||
2014 | 2014 | ||||||||||||
Principal outstanding | $ | 9,994 | $ | 9,994 | |||||||||
Stock Price | 0.57 | $ | 0.97 | ||||||||||
Risk-free interest rate | 0.88 | % | 0.93 | % | |||||||||
Expected annual dividend yield | — | % | — | % | |||||||||
Expected volatility | 72.7 | % | 71.6 | % | |||||||||
Term (years) | 2.8 | 3 | |||||||||||
Conversion price | $ | 1.06 | $ | 1.06 | |||||||||
Bond yield | 30 | % | 30 | % | |||||||||
Coupon rate | 6 | % | 6.7 | % | |||||||||
Commitments_and_Contingencies
Commitments and Contingencies | 6 Months Ended | |
Jun. 30, 2014 | ||
Commitments and Contingencies Disclosure [Abstract] | ' | |
Commitments and Contingencies Disclosure [Text Block] | ' | |
6 | Commitments and Contingencies | |
We are subject to legal proceedings and claims in the ordinary course of our business. These claims potentially cover a variety of allegations spanning our entire business. Information regarding the material pending legal proceedings to which we are a party or to which any of our property is subject and other material legal proceedings may be found in Part I, Item 3 of our 2013 Form 10-K. There have been no material changes to such proceedings. | ||
Stockholders_Equity
Stockholders' Equity | 6 Months Ended | |
Jun. 30, 2014 | ||
Equity [Abstract] | ' | |
Stockholders Equity Note Disclosure [Text Block] | ' | |
7 | Stockholders’ Equity | |
Our Certificate of Incorporation, which was adopted in connection with our initial public offering, authorized up to 80,000,000 shares of capital stock, of which 75,000,000 shares were designated as common stock, $0.0001 par value per share (“Common Stock”) and 5,000,000 shares were designated as preferred stock, $0.0001 par value per share. On April 17, 2014 the Certificate of Incorporation was amended to authorize up to 155,000,000 shares of capital stock, of which 150,000,000 shares were designated Common Stock and 5,000,000 shares were designated as preferred stock. At June 30, 2014 and December 31, 2013, there were 48,659,826 and 46,156,921 shares of Common Stock issued and outstanding, respectively, and there were no shares of preferred stock issued and outstanding. | ||
On June 3, 2014, we received a notification letter from The NASDAQ OMX Group (“NASDAQ”) indicating that the bid price of our Common Stock for the last 30 consecutive business days had closed below the minimum $1.00 per share required for continued listing under NASDAQ Listing Rule 5450(a)(1). The notification letter has no effect on the listing of Common Stock at this time, which will continue to trade on the NASDAQ Global Market under the symbol “BAXS”. We have been provided a period of 180 calendar days, or until December 1, 2014, to regain compliance. The letter states that the NASDAQ staff will provide written notification that we have regained compliance if at any time before December 1, 2014, the bid price of Common Stock closes at $1.00 per share or more for a minimum of 10 consecutive business days. In the event we do not regain compliance within the 180-day grace period, we may be eligible for additional time if we meet the continued listing requirement for market value of publicly held shares and all other initial listing standards, with the exception of the bid price requirement, and provide written notice to NASDAQ of our intent to cure the deficiency by effecting a reverse stock split, if necessary. If we are able to meet these requirements, the NASDAQ staff will inform us that we have been granted an additional 180 calendar days. If we fail to regain compliance after the second 180-day grace period, our Common Stock may be subject to delisting by NASDAQ. We intend to actively monitor the bid price for Common Stock and will consider available options to resolve the deficiency and regain compliance with the NASDAQ minimum bid price requirement. | ||
Stock Purchase Agreement | ||
On December 3, 2013, we entered into a purchase agreement (the “Purchase Agreement”) with Lincoln Park Capital Fund, LLC (“Lincoln Park”), pursuant to which we have the right to sell to Lincoln Park up to $7.0 million in shares of Common Stock, subject to certain limitations. Pursuant to the Purchase Agreement, we have the right, on any business day and as often as every other business day over the 36-month term of the Purchase Agreement, at our sole discretion and subject to certain conditions, to direct Lincoln Park to purchase up to 100,000 shares of Common Stock, which amount may be increased, in accordance with the Purchase Agreement. The purchase price of shares of Common Stock related to the future funding will be based upon the prevailing market prices of the Common Stock at the time of sales, and shares will be sold to Lincoln Park on any date that the closing price of the Common Stock is above the floor price as set forth in the Purchase Agreement. In addition, we may direct Lincoln Park to purchase additional amounts as accelerated purchases if, on the date of a regular purchase, the closing sale price of the Common Stock is not below a threshold price as set forth in the Purchase Agreement. | ||
As consideration for its commitment to purchase Common Stock pursuant to the Purchase Agreement, we issued to Lincoln Park 182,609 shares of Common Stock immediately upon entering the Purchase Agreement and will issue up to 60,870 shares pro rata as and when Lincoln Park purchases Common Stock under the Purchase Agreement. We will not receive any cash proceeds from the issuance of these commitment shares. As of June 30, 2014, 210,433 commitment shares were issued to Lincoln Park. During the three and six months ended June 30, 2014, we sold 0.7 million and 2.4 million shares, respectively, of Common Stock to Lincoln Park for an aggregate purchase price of $0.7 million and $2.5 million, respectively. | ||
Stock Purchase Agreement Modification | ||
Effective July 11, 2014, we modified our Purchase Agreement with Lincoln Park to, among other things, (i) increase the number of shares of Common Stock that we have the right to sell to Lincoln Park from 100,000 shares to 125,000 shares as often as every business day, which amount may be further increased in accordance with the Purchase Agreement, (ii) increase the aggregate amount of Common Stock that we have the right, subject to certain limitations, to direct Lincoln Park to purchase over the 36-month term of the Purchase Agreement from $7.0 million to $8.2 million, and (iii) decrease the floor closing price that the Common Stock must trade above in order for sales to be made to Lincoln Park under the Purchase Agreement from $1.00 to $0.50 per share. Following the modification, the number of shares potentially issuable by us on a pro rata basis as and when Lincoln Park purchases Common Stock under the Purchase Agreement increased to 657,895 shares. | ||
Warrant Agreement | ||
In connection with the Credit Facility, we issued to Hercules the Warrant. The aggregate number of shares issuable upon exercise is limited to 1,176,471. The Warrant is exercisable until the fifth anniversary of the Credit Facility Closing Date and will be exercised automatically on a net issuance basis if not exercised prior to the expiration date. See further details under “Common Stock Warrant Liability for Hercules” in Note 5. | ||
Stock_Incentive_Plans_and_Stoc
Stock Incentive Plans and Stock-Based Compensation | 6 Months Ended | |||||||||||
Jun. 30, 2014 | ||||||||||||
Compensation and Retirement Disclosure [Abstract] | ' | |||||||||||
Compensation and Employee Benefit Plans [Text Block] | ' | |||||||||||
8 | Stock Incentive Plans and Stock-Based Compensation | |||||||||||
We have an employee stock purchase plan and other long-term incentive plans, which provide for the grant of awards in the form of incentive stock options, nonqualified stock options and restricted stock units (RSUs), to eligible employees, directors, and consultants. We established the Baxano Surgical, Inc. 2007 Stock Incentive Plan (as amended, the “2007 Plan”) in October 2007. Under the 2007 Plan, we may grant options to employees, directors or service providers and contractors for a maximum of 7,600,000 shares of Common Stock. Share-based compensation expense was $0.3 million for the three months ended June 30, 2014 and 2013 and $0.7 million and $0.6 million for the six months ended June 30, 2014 and 2013, respectively. | ||||||||||||
Stock Option Program | ||||||||||||
The following table is a summary of stock option activity for the six months ended June 30, 2014: | ||||||||||||
Shares | Weighted | Weighted | Aggregate | |||||||||
Average | Average | Intrinsic | ||||||||||
Exercise | Remaining | Value | ||||||||||
Price | Contractual | |||||||||||
Term (Years) | ||||||||||||
Outstanding as of December 31, 2013 | 3,985,590 | $ | 3.31 | 7.71 | $ | 11,125 | ||||||
Options granted | 1,294,000 | 0.78 | 9.84 | - | ||||||||
Options exercised | -2,000 | 0.28 | 0.03 | 856 | ||||||||
Options expired or canceled | -174,701 | 5.32 | 6.24 | - | ||||||||
Options forfeited | -694,925 | 1.93 | - | - | ||||||||
Outstanding as of June 30, 2014 | 4,407,964 | $ | 2.71 | 7.77 | $ | 3,855 | ||||||
Exercisable at June 30, 2014 | 2,199,577 | $ | 3.89 | 6.35 | $ | 3,855 | ||||||
Vested and expected to vest as of June 30, 2014 | 4,188,471 | $ | 2.77 | 7.69 | $ | 3,855 | ||||||
The aggregate intrinsic value in the table above represents the difference between the $0.57 closing price of Common Stock as reported by The NASDAQ Global Market on June 30, 2014 and the weighted average exercise price, multiplied by the number of options outstanding or exercisable. We do not record the aggregate intrinsic value for financial accounting purposes and the value changes based upon changes in the fair value of Common Stock. | ||||||||||||
The following weighted-average assumptions were used to estimate the fair value of stock options granted during the six months ended June 30, 2014: | ||||||||||||
Risk-free interest rate | 1.9 | % | ||||||||||
Expected term | 6 | |||||||||||
Expected volatility | 63.4 | % | ||||||||||
Expected dividend yield | 0 | % | ||||||||||
Restricted Stock Unit Retention Program | ||||||||||||
On January 2, 2014, the Compensation Committee of our Board of Directors approved the terms of the 2014 Restricted Stock Unit Retention Program (the “RSU Program”) and the grant of restricted stock units (“RSUs”) to all our executives and management pursuant to the RSU Program and our 2007 Stock Incentive Plan, as amended. Each award amount equals a number of stock-settled RSUs reflecting one times the employee’s current salary at a target value of $3.00 per share of Common Stock. A portion of the RSU awards is subject to time-based vesting and a portion of the RSU awards is subject to performance-based vesting as outlined below: | ||||||||||||
⋅ | 75% is time-based (25% vests on first anniversary of grant date, 37.5% vests on second and third anniversaries of grant date); | |||||||||||
⋅ | 25% is performance-based (100% vests upon the achievement of a 30% increase in Company revenue year-over-year for two successive quarters by the end of fiscal 2016). | |||||||||||
The following table is a summary of restricted stock activity for the six months ended June 30, 2014: | ||||||||||||
Outstanding as of December 31, 2013 | - | |||||||||||
Granted | 3,055,997 | |||||||||||
Forfeited | -865,778 | |||||||||||
Outstanding as of June 30, 2014 | 2,190,219 | |||||||||||
Income_Taxes
Income Taxes | 6 Months Ended | |
Jun. 30, 2014 | ||
Income Tax Disclosure [Abstract] | ' | |
Income Tax Disclosure [Text Block] | ' | |
9 | Income Taxes | |
No provisions for federal or state income taxes have been recorded as we have incurred net operating losses since inception. | ||
Other_Condensed_Consolidated_B
Other Condensed Consolidated Balance Sheet Information | 6 Months Ended | |||||||
Jun. 30, 2014 | ||||||||
Condensed Financial Information of Parent Company Only Disclosure [Abstract] | ' | |||||||
Condensed Financial Information of Parent Company Only Disclosure [Text Block] | ' | |||||||
10 | Other Condensed Consolidated Balance Sheet Information | |||||||
Information regarding other accounts on our condensed consolidated balance sheets is as follows (in thousands): | ||||||||
Property and equipment, net | ||||||||
June 30, | December 31, | |||||||
2014 | 2013 | |||||||
Furniture and fixtures | $ | 494 | $ | 484 | ||||
Equipment | 7,127 | 6,459 | ||||||
Computer software | 501 | 496 | ||||||
Leasehold improvements | 1,080 | 1,080 | ||||||
Capital leases of buildings | 51 | 51 | ||||||
Construction in process | 32 | - | ||||||
9,285 | 8,570 | |||||||
Less: accumulated depreciation and amortization | -6,711 | -5,523 | ||||||
$ | 2,574 | $ | 3,047 | |||||
Accrued expenses | ||||||||
June 30, | December 31, | |||||||
2014 | 2013 | |||||||
Accrued payroll, bonuses, and employee benefits | $ | 1,738 | $ | 2,343 | ||||
Legal and professional fees | 390 | 638 | ||||||
Interest payable | 209 | 100 | ||||||
Royalties | 206 | 243 | ||||||
Business taxes and licenses | 92 | 122 | ||||||
Travel and entertainment | 359 | 48 | ||||||
Other | 114 | 99 | ||||||
Total accrued expenses | $ | 3,108 | $ | 3,593 | ||||
Subsequent_Events
Subsequent Events | 6 Months Ended |
Jun. 30, 2014 | |
Subsequent Events [Abstract] | ' |
Subsequent Events [Text Block] | ' |
11 | |
Subsequent Event | |
In connection with the expiration of the lease on our San Jose facility in early December 2014 and after careful consideration of all of our options, we commenced a plan in July 2014 that is designed to improve our operational performance for the future. The plan calls for us to close the San Jose facility and outsource the manufacturing of the iO-Flex, iO-Tome sterile assemblies and AxiaLIF Blade Subassembly conducted at the facility. We expect the product transfer to be completed in the fourth quarter of 2014. There were no costs associated with this plan that were required to be recognized in the consolidated condensed financial statement for the period ended June 30, 2014. | |
Summary_of_Significant_Account1
Summary of Significant Accounting Policies (Policies) | 6 Months Ended | |||||||||||||
Jun. 30, 2014 | ||||||||||||||
Accounting Policies [Abstract] | ' | |||||||||||||
Basis of Accounting, Policy [Policy Text Block] | ' | |||||||||||||
Basis of Presentation | ||||||||||||||
We have prepared the accompanying unaudited interim condensed consolidated financial statements in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial statements and with the instructions to Form 10-Q and Article 10 of Regulation S-X issued by the Securities and Exchange Commission (“SEC”). Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. GAAP have been condensed or omitted pursuant to such SEC rules and regulations. The accompanying unaudited interim condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2013 filed with the SEC on March 10, 2014 (“2013 Form 10-K”). The Company’s historical results are not necessarily indicative of future operating results, and the results for the three and six months ended June 30, 2014 are not necessarily indicative of results to be expected for the full year or for any other period. | ||||||||||||||
In our opinion, the accompanying unaudited interim condensed consolidated financial statements have been prepared on the same basis as our annual audited consolidated financial statements and contain all material adjustments (consisting of normal recurring accruals and adjustments) which are, in the opinion of Company’s management necessary to present fairly our financial condition, results of operations, and cash flows for the periods presented. These principles require management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. The principal estimates relate to accounts receivable reserves, inventory valuation, valuation of stock-based compensation, accrued expenses, deferred tax asset valuation reserves, and the valuation of embedded derivatives and warrants for common stock. Actual results could differ from those estimates. The condensed consolidated balance sheet that we have presented as of December 31, 2013 has been derived from the audited consolidated financial statements on that date, but does not include all of the information and footnotes required by U.S. GAAP for complete financial statements. | ||||||||||||||
Our financial statements are prepared on the basis that our business will continue as a going concern in accordance with U.S. GAAP. This basis of presentation assumes that we will continue in operation for the foreseeable future and will be able to realize our assets and discharge our liabilities and commitments in the normal course of business. However, our independent registered public accounting firm has indicated in its audit report on our fiscal 2013 financial statements, included in our 2013 Form 10-K, that our recurring losses and negative cash flows from operations raise substantial doubt about our ability to continue as a going concern. The financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or amounts of liabilities that might result from the outcome of this uncertainty. | ||||||||||||||
At June 30, 2014, our principal sources of liquidity consisted of cash and cash equivalents of $2.3 million and accounts receivable, net of $3.8 million. Our ability to fund our cash and future liquidity requirements is dependent on our ability to raise additional capital, increase revenues, maintain our relationships with certain vendors, successfully avoid an event of default under our debt agreements, maintain tight controls over spending and attain our other business objectives on a timely basis. To meet our capital needs, we are actively pursuing multiple alternatives to raise additional funds, including additional debt or equity financings and other sources of funding. If we are unable to obtain the necessary capital from cash flows from operations and the infusion of additional capital to fund our operations in the near term, we will need to implement further expense reduction measures, including workforce reductions, the consolidation of operations and/or the delay or cancellation of certain operational programs, pursue a plan to license or sell our assets, or to cease operations. Please refer to “—Liquidity and Capital Resources” in the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” section of this Form 10-Q for a discussion of our cash requirements and efforts to obtain additional capital. | ||||||||||||||
Inventory, Policy [Policy Text Block] | ' | |||||||||||||
Inventory | ||||||||||||||
The following table presents the components of inventory (in thousands): | ||||||||||||||
June 30, | December 31, | |||||||||||||
2014 | 2013 | |||||||||||||
Finished goods | $ | 4,887 | $ | 4,607 | ||||||||||
Raw materials | 1,600 | 1,584 | ||||||||||||
Work-in-process | 694 | 846 | ||||||||||||
Total inventories, net | $ | 7,181 | $ | 7,037 | ||||||||||
Segment Reporting, Policy [Policy Text Block] | ' | |||||||||||||
Segment and Geographic Reporting | ||||||||||||||
We apply the relevant guidance which establishes standards for the reporting by business enterprises of information about operating segments, products and services, geographic areas, and major customers. We have determined that we did not have any separately reportable segments. All our products provide surgical treatment for the lumbar region of the spine. Long-lived assets are primarily located in the United States. | ||||||||||||||
The following table summarizes revenue by geographic area (in thousands): | ||||||||||||||
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||
United States | $ | 4,482 | $ | 3,687 | $ | 8,745 | $ | 6,281 | ||||||
Europe | 151 | 176 | 244 | 659 | ||||||||||
Asia | 23 | 14 | 79 | 37 | ||||||||||
$ | 4,656 | $ | 3,877 | $ | 9,068 | $ | 6,977 | |||||||
Earnings Per Share, Policy [Policy Text Block] | ' | |||||||||||||
Net Loss per Common Share | ||||||||||||||
We calculate basic earnings per share based upon the weighted average number of common shares outstanding. We calculate diluted earnings per share based upon the weighted average number of common shares outstanding plus the dilutive effect of common share equivalents calculated using the treasury stock method. Our potential dilutive common shares, which consist of shares issuable upon the exercise of stock options, restricted stock units, warrants and conversion of notes, have not been included in the computation of diluted net loss per common share for all periods as the result would be anti-dilutive. The following table sets forth the potential shares of common stock that are not included in the calculation of diluted net loss per share as the result would be anti-dilutive as of the end of each period presented: | ||||||||||||||
Three Months Ended | Six Months Ended | |||||||||||||
June 30, | June 30, | |||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||
Weighted average stock options and restricted stock units outstanding | 6,089,502 | 4,093,296 | 5,773,266 | 3,702,905 | ||||||||||
Common stock warrants related to credit facility | 882,353 | - | 882,353 | - | ||||||||||
Common stock warrants related to convertible notes | 7,252,308 | - | 3,646,188 | - | ||||||||||
New Accounting Pronouncements, Policy [Policy Text Block] | ' | |||||||||||||
Recently Issued Accounting Standards | ||||||||||||||
In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update 2014-09, Revenue from Contracts with Customers (“ASU 2014-09”). The FASB issued ASU 2014-09 to clarify the principles for recognizing revenue and to develop a common revenue standard for U.S. GAAP and International Financial Reporting Standards. The standard outlines a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and supersedes the most current revenue recognition guidance. This guidance is effective for fiscal years and interim periods within those years beginning after December 15, 2016. We are currently evaluating the impact that the implementation of this standard will have on our consolidated financial statements. | ||||||||||||||
Summary_of_Significant_Account2
Summary of Significant Accounting Policies (Tables) | 6 Months Ended | |||||||||||||
Jun. 30, 2014 | ||||||||||||||
Accounting Policies [Abstract] | ' | |||||||||||||
Schedule of Inventory, Current [Table Text Block] | ' | |||||||||||||
The following table presents the components of inventory (in thousands): | ||||||||||||||
June 30, | December 31, | |||||||||||||
2014 | 2013 | |||||||||||||
Finished goods | $ | 4,887 | $ | 4,607 | ||||||||||
Raw materials | 1,600 | 1,584 | ||||||||||||
Work-in-process | 694 | 846 | ||||||||||||
Total inventories, net | $ | 7,181 | $ | 7,037 | ||||||||||
Schedule of Segment Reporting Information, by Segment [Table Text Block] | ' | |||||||||||||
The following table summarizes revenue by geographic area (in thousands): | ||||||||||||||
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||
United States | $ | 4,482 | $ | 3,687 | $ | 8,745 | $ | 6,281 | ||||||
Europe | 151 | 176 | 244 | 659 | ||||||||||
Asia | 23 | 14 | 79 | 37 | ||||||||||
$ | 4,656 | $ | 3,877 | $ | 9,068 | $ | 6,977 | |||||||
Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share [Table Text Block] | ' | |||||||||||||
The following table sets forth the potential shares of common stock that are not included in the calculation of diluted net loss per share as the result would be anti-dilutive as of the end of each period presented: | ||||||||||||||
Three Months Ended | Six Months Ended | |||||||||||||
June 30, | June 30, | |||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||
Weighted average stock options and restricted stock units outstanding | 6,089,502 | 4,093,296 | 5,773,266 | 3,702,905 | ||||||||||
Common stock warrants related to credit facility | 882,353 | - | 882,353 | - | ||||||||||
Common stock warrants related to convertible notes | 7,252,308 | - | 3,646,188 | - | ||||||||||
Merger_Tables
Merger (Tables) | 6 Months Ended | |||||||
Jun. 30, 2014 | ||||||||
Business Combinations [Abstract] | ' | |||||||
Business Acquisition, Pro Forma Information [Table Text Block] | ' | |||||||
The following table presents the pro forma results (in thousands, except per share data): | ||||||||
June 30, 2013 | ||||||||
Three Months | Six Months | |||||||
Ended | Ended | |||||||
Revenue | $ | 5,650 | $ | 11,702 | ||||
Operating loss | $ | -12,099 | $ | -23,514 | ||||
Net loss | $ | -12,230 | $ | -23,730 | ||||
Net loss per common share | $ | -0.27 | $ | -0.53 | ||||
Goodwill_and_Intangible_Assets1
Goodwill and Intangible Assets (Tables) | 6 Months Ended | ||||||
Jun. 30, 2014 | |||||||
Goodwill and Intangible Assets Disclosure [Abstract] | ' | ||||||
Schedule of Intangible Assets and Goodwill [Table Text Block] | ' | ||||||
Intangible assets as of June 30, 2014 consisted of the following (in thousands): | |||||||
Amortization | |||||||
Period (Years) | |||||||
Trademark | $ | 830 | Indefinite | ||||
Product trademarks | 1,530 | 15-17 | |||||
Technology | 13,001 | 15-17 | |||||
Customer relationships | 475 | 10 | |||||
15,836 | |||||||
Less: accumulated amortization | -1,071 | ||||||
$ | 14,765 | ||||||
Credit_Facility_Convertible_No1
Credit Facility, Convertible Notes and Common Stock Warrants (Tables) | 6 Months Ended | ||||||||||||
Jun. 30, 2014 | |||||||||||||
Schedule of Long-term Debt Instruments [Table Text Block] | ' | ||||||||||||
The following table presents the components of the Credit Facility (in thousands): | |||||||||||||
June 30, | December 31, | ||||||||||||
2014 | 2013 | ||||||||||||
Advance | $ | 7,500 | $ | 7,500 | |||||||||
Final payment | 263 | 263 | |||||||||||
Debt discounts, including common stock warrant | -780 | -932 | |||||||||||
Total long-term debt | 6,983 | 6,831 | |||||||||||
Less: Current portion of long-term debt | -1,940 | -563 | |||||||||||
Total long-term debt, net of current portion | $ | 5,043 | $ | 6,268 | |||||||||
Convertible Debt [Table Text Block] | ' | ||||||||||||
Convertible notes as of June 30, 2014 consisted of the following (in thousands): | |||||||||||||
Principal | $ | 9,994 | |||||||||||
Discounts, including common stock warrant and embedded derivative | -4,524 | ||||||||||||
Total long-term debt | 5,470 | ||||||||||||
Less: Current portion of convertible notes | - | ||||||||||||
Total convertible notes, net of current portion | $ | 5,470 | |||||||||||
Schedule Of Derivative Liabilities And Common Stock Warrant Liabilities [Table Text Block] | ' | ||||||||||||
The following table sets forth a summary of the changes in the fair value of our financial instruments (in thousands): | |||||||||||||
Derivative | Common | Common | |||||||||||
Liability | Stock Warrant | Stock Warrant | |||||||||||
Associated with | Liability | Liability | |||||||||||
Convertible | Associated with | Associated with | |||||||||||
Notes | Convertible Notes | Credit Facility | |||||||||||
Fair value as of December 31, 2013 | $ | — | $ | — | $ | 528 | |||||||
Fair value of financial instruments issued | 1,980 | 2,734 | — | ||||||||||
Change in fair value | -1,042 | -1,280 | -302 | ||||||||||
Fair value as of June 30, 2014 | $ | 938 | $ | 1,454 | $ | 226 | |||||||
Common Stock Warrant Liability Associated with Credit Facility [Member] | ' | ||||||||||||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Table Text Block] | ' | ||||||||||||
Following is a summary of the key assumptions used to calculate the fair value of the Credit Facility Warrant: | |||||||||||||
Issuance | |||||||||||||
June 30, | December 31, | December 3, | |||||||||||
2014 | 2013 | 2013 | |||||||||||
Stock Price | $ | 0.57 | $ | 1.01 | $ | 1.18 | |||||||
Risk-free interest rate | 1.6 | % | 1.8 | % | 1.4 | % | |||||||
Expected annual dividend yield | — | % | — | % | — | % | |||||||
Expected volatility | 73.9 | % | 73.6 | % | 74.2 | % | |||||||
Term (years) | 4.4 | 4.9 | 5 | ||||||||||
Common Stock Warrant Liability Associated with Debentures [Member] | ' | ||||||||||||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Table Text Block] | ' | ||||||||||||
Following is a summary of the key assumptions used to value the warrant liability associated with the Convertible Warrants: | |||||||||||||
Issuance | |||||||||||||
June 30, | April 22, | ||||||||||||
2014 | 2014 | ||||||||||||
Stock price | $ | 0.57 | $ | 0.97 | |||||||||
Strike price | 1.19 | 1.19 | |||||||||||
Risk-free interest rate | 1.6 | % | 1.4 | % | |||||||||
Expected annual dividend yield | — | % | — | % | |||||||||
Expected volatility | 30 | % | 30 | % | |||||||||
Term (years) | 4.8 | 5 | |||||||||||
Derivative Liability Associated Convertible Notes [Member] | ' | ||||||||||||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Table Text Block] | ' | ||||||||||||
Following is a summary of the key assumptions used to value the embedded derivatives associated with the Convertible Notes: | |||||||||||||
June 30, | Issuance | ||||||||||||
April 22, | |||||||||||||
2014 | 2014 | ||||||||||||
Principal outstanding | $ | 9,994 | $ | 9,994 | |||||||||
Stock Price | 0.57 | $ | 0.97 | ||||||||||
Risk-free interest rate | 0.88 | % | 0.93 | % | |||||||||
Expected annual dividend yield | — | % | — | % | |||||||||
Expected volatility | 72.7 | % | 71.6 | % | |||||||||
Term (years) | 2.8 | 3 | |||||||||||
Conversion price | $ | 1.06 | $ | 1.06 | |||||||||
Bond yield | 30 | % | 30 | % | |||||||||
Coupon rate | 6 | % | 6.7 | % | |||||||||
Stock_Incentive_Plans_and_Stoc1
Stock Incentive Plans and Stock-Based Compensation (Tables) | 6 Months Ended | |||||||||||
Jun. 30, 2014 | ||||||||||||
Compensation and Retirement Disclosure [Abstract] | ' | |||||||||||
Schedule of Share-based Compensation, Stock Options, Activity [Table Text Block] | ' | |||||||||||
The following table is a summary of stock option activity for the six months ended June 30, 2014: | ||||||||||||
Shares | Weighted | Weighted | Aggregate | |||||||||
Average | Average | Intrinsic | ||||||||||
Exercise | Remaining | Value | ||||||||||
Price | Contractual | |||||||||||
Term (Years) | ||||||||||||
Outstanding as of December 31, 2013 | 3,985,590 | $ | 3.31 | 7.71 | $ | 11,125 | ||||||
Options granted | 1,294,000 | 0.78 | 9.84 | - | ||||||||
Options exercised | -2,000 | 0.28 | 0.03 | 856 | ||||||||
Options expired or canceled | -174,701 | 5.32 | 6.24 | - | ||||||||
Options forfeited | -694,925 | 1.93 | - | - | ||||||||
Outstanding as of June 30, 2014 | 4,407,964 | $ | 2.71 | 7.77 | $ | 3,855 | ||||||
Exercisable at June 30, 2014 | 2,199,577 | $ | 3.89 | 6.35 | $ | 3,855 | ||||||
Vested and expected to vest as of June 30, 2014 | 4,188,471 | $ | 2.77 | 7.69 | $ | 3,855 | ||||||
Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions [Table Text Block] | ' | |||||||||||
The following weighted-average assumptions were used to estimate the fair value of stock options granted during the six months ended June 30, 2014: | ||||||||||||
Risk-free interest rate | 1.9 | % | ||||||||||
Expected term | 6 | |||||||||||
Expected volatility | 63.4 | % | ||||||||||
Expected dividend yield | 0 | % | ||||||||||
Schedule of Share-based Compensation, Restricted Stock Units Award Activity [Table Text Block] | ' | |||||||||||
The following table is a summary of restricted stock activity for the six months ended June 30, 2014: | ||||||||||||
Outstanding as of December 31, 2013 | - | |||||||||||
Granted | 3,055,997 | |||||||||||
Forfeited | -865,778 | |||||||||||
Outstanding as of June 30, 2014 | 2,190,219 | |||||||||||
Other_Condensed_Consolidated_B1
Other Condensed Consolidated Balance Sheet Information (Tables) | 6 Months Ended | |||||||
Jun. 30, 2014 | ||||||||
Condensed Financial Information of Parent Company Only Disclosure [Abstract] | ' | |||||||
Property, Plant and Equipment [Table Text Block] | ' | |||||||
Property and equipment, net | ||||||||
June 30, | December 31, | |||||||
2014 | 2013 | |||||||
Furniture and fixtures | $ | 494 | $ | 484 | ||||
Equipment | 7,127 | 6,459 | ||||||
Computer software | 501 | 496 | ||||||
Leasehold improvements | 1,080 | 1,080 | ||||||
Capital leases of buildings | 51 | 51 | ||||||
Construction in process | 32 | - | ||||||
9,285 | 8,570 | |||||||
Less: accumulated depreciation and amortization | -6,711 | -5,523 | ||||||
$ | 2,574 | $ | 3,047 | |||||
Schedule of Accrued Liabilities [Table Text Block] | ' | |||||||
Accrued expenses | ||||||||
June 30, | December 31, | |||||||
2014 | 2013 | |||||||
Accrued payroll, bonuses, and employee benefits | $ | 1,738 | $ | 2,343 | ||||
Legal and professional fees | 390 | 638 | ||||||
Interest payable | 209 | 100 | ||||||
Royalties | 206 | 243 | ||||||
Business taxes and licenses | 92 | 122 | ||||||
Travel and entertainment | 359 | 48 | ||||||
Other | 114 | 99 | ||||||
Total accrued expenses | $ | 3,108 | $ | 3,593 | ||||
Summary_of_Significant_Account3
Summary of Significant Accounting Policies (Details) (USD $) | Jun. 30, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Inventory [Line Items] | ' | ' |
Finished goods | $4,887 | $4,607 |
Raw materials | 1,600 | 1,584 |
Work-in-process | 694 | 846 |
Total inventories, net | $7,181 | $7,037 |
Summary_of_Significant_Account4
Summary of Significant Accounting Policies (Details 1) (USD $) | 3 Months Ended | 6 Months Ended | ||
In Thousands, unless otherwise specified | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 |
Segment Reporting Information [Line Items] | ' | ' | ' | ' |
Revenue | $4,656 | $3,877 | $9,068 | $6,977 |
United States [Member] | ' | ' | ' | ' |
Segment Reporting Information [Line Items] | ' | ' | ' | ' |
Revenue | 4,482 | 3,687 | 8,745 | 6,281 |
Europe [Member] | ' | ' | ' | ' |
Segment Reporting Information [Line Items] | ' | ' | ' | ' |
Revenue | 151 | 176 | 244 | 659 |
Asia [Member] | ' | ' | ' | ' |
Segment Reporting Information [Line Items] | ' | ' | ' | ' |
Revenue | $23 | $14 | $79 | $37 |
Summary_of_Significant_Account5
Summary of Significant Accounting Policies (Details 2) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | |
Stock Option [Member] | ' | ' | ' | ' |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ' | ' | ' | ' |
Antidilutive Securities Excluded From Computation Of Earnings Per Share Amount (in shares) | 6,089,502 | 4,093,296 | 5,773,266 | 3,702,905 |
Warrant [Member] | ' | ' | ' | ' |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ' | ' | ' | ' |
Antidilutive Securities Excluded From Computation Of Earnings Per Share Amount (in shares) | 882,353 | 0 | 882,353 | 0 |
Stock Options And Restricted Stock Units [Member] | ' | ' | ' | ' |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ' | ' | ' | ' |
Antidilutive Securities Excluded From Computation Of Earnings Per Share Amount (in shares) | 7,252,308 | 0 | 3,646,188 | 0 |
Summary_of_Significant_Account6
Summary of Significant Accounting Policies (Details Textual) (USD $) | Jun. 30, 2014 | Dec. 31, 2013 | Jun. 30, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||||
Accounting Policies [Line Items] | ' | ' | ' | ' |
Cash and Cash Equivalents, at Carrying Value, Total | $2,326 | $8,540 | $19,602 | $21,541 |
Accounts Receivable, Net, Current, Total | $3,754 | $4,699 | ' | ' |
Merger_Details
Merger (Details) (USD $) | 3 Months Ended | 6 Months Ended |
In Thousands, except Per Share data, unless otherwise specified | Jun. 30, 2013 | Jun. 30, 2013 |
Business Acquisition, Pro Forma Information [Line Items] | ' | ' |
Revenue | $5,650 | $11,702 |
Operating loss | -12,099 | -23,514 |
Net loss | ($12,230) | ($23,730) |
Net loss per common share (in dollars per share) | ($270) | ($530) |
Goodwill_and_Intangible_Assets2
Goodwill and Intangible Assets (Details) (USD $) | 6 Months Ended |
In Thousands, unless otherwise specified | Jun. 30, 2014 |
Intangible Assets By Major Class [Line Items] | ' |
Trademark | 830 |
Product trademarks | 1,530 |
Technology | 13,001 |
Customer relationships | 475 |
Total intangible assets, Gross | 15,836 |
Less: accumulated amortization | -1,071 |
Total intangible assets, Net | 14,765 |
Trademarks and Trade Names [Member] | ' |
Intangible Assets By Major Class [Line Items] | ' |
Amortization period | 'Indefinite |
Product Trademark [Member] | Maximum [Member] | ' |
Intangible Assets By Major Class [Line Items] | ' |
Amortization period | '17 Years |
Product Trademark [Member] | Minimum [Member] | ' |
Intangible Assets By Major Class [Line Items] | ' |
Amortization period | '15 Years |
Technology [Member] | Maximum [Member] | ' |
Intangible Assets By Major Class [Line Items] | ' |
Amortization period | '17 Years |
Technology [Member] | Minimum [Member] | ' |
Intangible Assets By Major Class [Line Items] | ' |
Amortization period | '15 Years |
Customer Relationships [Member] | ' |
Intangible Assets By Major Class [Line Items] | ' |
Amortization period | '10 Years |
Goodwill_and_Intangible_Assets3
Goodwill and Intangible Assets (Details Textual) (USD $) | 3 Months Ended | 6 Months Ended | |
Jun. 30, 2014 | Jun. 30, 2014 | Dec. 31, 2013 | |
Indefinite-lived Intangible Assets [Line Items] | ' | ' | ' |
Goodwill | $8,463,000 | $8,463,000 | $8,463,000 |
Amortization of Intangible Assets | $500,000 | $800,000 | ' |
Credit_Facility_Convertible_No2
Credit Facility, Convertible Notes and Common Stock Warrants (Details) (USD $) | Jun. 30, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Debt Instrument [Line Items] | ' | ' |
Advance | $7,500 | $7,500 |
Final payment | 263 | 263 |
Debt discounts, including common stock warrant | -780 | -932 |
Total long-term debt | 6,983 | 6,831 |
Less: Current portion of long-term debt | -1,940 | -563 |
Total long-term debt, net of current portion | $5,043 | $6,268 |
Credit_Facility_Convertible_No3
Credit Facility, Convertible Notes and Common Stock Warrants (Details 1) (USD $) | Jun. 30, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Debt Instrument [Line Items] | ' | ' |
Principal | $7,500 | $7,500 |
Discounts, including common stock warrant and embedded derivative | -780 | -932 |
Total convertible notes, net of current portion | 5,470 | 0 |
Convertible Notes Payable [Member] | ' | ' |
Debt Instrument [Line Items] | ' | ' |
Principal | 9,994 | ' |
Discounts, including common stock warrant and embedded derivative | -4,524 | ' |
Total long-term debt | 5,470 | ' |
Less: Current portion of convertible notes | 0 | ' |
Total convertible notes, net of current portion | $5,470 | ' |
Credit_Facility_Convertible_No4
Credit Facility, Convertible Notes and Common Stock Warrants (Details 2) (USD $) | 3 Months Ended | 6 Months Ended | ||
In Thousands, unless otherwise specified | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 |
Line of Credit Facility [Line Items] | ' | ' | ' | ' |
Change in fair value | $2,676 | $0 | $2,624 | $0 |
Derivative Liability Associated with Convertible Notes [Member] | Fair Value, Inputs, Level 3 [Member] | ' | ' | ' | ' |
Line of Credit Facility [Line Items] | ' | ' | ' | ' |
Fair value as of December 31, 2013 | ' | ' | 0 | ' |
Fair value of financial instruments issued | ' | ' | 1,980 | ' |
Change in fair value | ' | ' | -1,042 | ' |
Fair value as of June 30, 2014 | 938 | ' | 938 | ' |
Common Stock Warrant Liability Associated with Convertible Notes [Member] | Fair Value, Inputs, Level 3 [Member] | ' | ' | ' | ' |
Line of Credit Facility [Line Items] | ' | ' | ' | ' |
Fair value as of December 31, 2013 | ' | ' | 0 | ' |
Fair value of financial instruments issued | ' | ' | 2,734 | ' |
Change in fair value | ' | ' | -1,280 | ' |
Fair value as of June 30, 2014 | 1,454 | ' | 1,454 | ' |
Common Stock Warrant Liability Associated with Credit Facility [Member] | Fair Value, Inputs, Level 3 [Member] | ' | ' | ' | ' |
Line of Credit Facility [Line Items] | ' | ' | ' | ' |
Fair value as of December 31, 2013 | ' | ' | 528 | ' |
Fair value of financial instruments issued | ' | ' | 0 | ' |
Change in fair value | ' | ' | -302 | ' |
Fair value as of June 30, 2014 | $226 | ' | $226 | ' |
Credit_Facility_Convertible_No5
Credit Facility, Convertible Notes and Common Stock Warrants (Details 3) (USD $) | Jun. 30, 2014 | Dec. 31, 2013 | Apr. 22, 2014 | Jun. 30, 2014 | Dec. 03, 2013 | Jun. 30, 2014 | Dec. 31, 2013 | Apr. 22, 2014 | Jun. 30, 2014 |
Derivative Liability Associated Convertible Notes [Member] | Derivative Liability Associated Convertible Notes [Member] | Common Stock Warrant Liability Associated with Credit Facility [Member] | Common Stock Warrant Liability Associated with Credit Facility [Member] | Common Stock Warrant Liability Associated with Credit Facility [Member] | Common Stock Warrant Liability Associated with Debentures [Member] | Common Stock Warrant Liability Associated with Debentures [Member] | |||
Line of Credit Facility [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Principal outstanding | $7,500,000 | $7,500,000 | $9,994,000 | $9,994,000 | ' | ' | ' | ' | ' |
Stock price | ' | ' | $0.97 | $0.57 | $1.18 | $0.57 | $1.01 | $0.97 | $0.57 |
Strike price | ' | ' | ' | ' | ' | ' | ' | 1.19 | 1.19 |
Risk-free interest rate | ' | ' | 0.93% | 0.88% | 1.40% | 1.60% | 1.80% | 1.40% | 1.60% |
Expected annual dividend yield | ' | ' | 0.00% | 0.00% | 0.00% | 0.00% | 0.00% | 0.00% | 0.00% |
Expected volatility | ' | ' | 71.60% | 72.70% | 74.20% | 73.90% | 73.60% | 30.00% | 30.00% |
Term (years) | ' | ' | ' | ' | '5 years | '4 years 4 months 24 days | '4 years 10 months 24 days | '5 years | '4 years 9 months 18 days |
Fair value | ' | ' | ' | ' | $700,000 | $200,000 | $500,000 | ' | ' |
Conversion price | ' | ' | ' | $1.06 | ' | $1.06 | ' | $1.06 | ' |
Bond yield | ' | ' | ' | ' | ' | 30.00% | ' | 30.00% | ' |
Coupon rate | ' | ' | ' | ' | ' | 6.00% | ' | 6.70% | ' |
Credit_Facility_Convertible_No6
Credit Facility, Convertible Notes and Common Stock Warrants (Details Textual) (USD $) | 6 Months Ended | 6 Months Ended | 6 Months Ended | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2014 | Dec. 31, 2013 | Jun. 30, 2014 | Apr. 22, 2014 | Jun. 30, 2014 | Dec. 31, 2013 | Jun. 30, 2014 | Jun. 30, 2014 | |
Derivative Liability Associated Convertible Notes [Member] | Derivative Liability Associated Convertible Notes [Member] | Convertible Notes [Member] | Hercules Technology [Member] | Hercules Technology [Member] | Hercules Technology [Member] | |||
Warrant One [Member] | Warrant Two [Member] | |||||||
Debt Instrument [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' |
Debt Instrument, Face Amount | $7,500,000 | $7,500,000 | $9,994,000 | $9,994,000 | $10,000,000 | ' | ' | ' |
Class of Warrant or Right, Number of Securities Called by Warrants or Rights | ' | ' | 9,428,000 | ' | ' | ' | ' | ' |
Debt Instrument, Convertible, Conversion Price | ' | ' | $1.06 | ' | ' | ' | ' | ' |
Debt Instrument, Interest Rate, Stated Percentage | ' | ' | 6.00% | ' | ' | ' | ' | ' |
Debt Instrument, Interest Rate Terms | ' | ' | 'The Convertible Notes bear interest at a rate of 6% per annum, payable monthly in cash or, at our discretion provided certain conditions ("Equity Conditions") are met each payment period, in shares of Common Stock at a price equal to 90% of a calculated market price per share. | ' | ' | ' | ' | ' |
Class of Warrant or Right, Exercise Price of Warrants or Rights | ' | ' | $1.19 | ' | ' | ' | ' | ' |
Warrant Term | ' | ' | 'five-year | ' | ' | ' | ' | ' |
Credit Facility Subordination Agreement Amount Subject To Cap | ' | ' | 1,500,000 | ' | ' | ' | ' | ' |
Onetime non-refundable cash facility fee | ' | ' | 300,000 | ' | ' | ' | ' | ' |
Debentures cross default provisions | 'Upon the occurrence of an "Event of Default," the interest rate on the Convertible Notes increases to 15% and we can be required to redeem the Convertible Notes in whole or in part in cash at 110% of the outstanding balance. | ' | ' | ' | ' | ' | ' | ' |
Debentures and Warrants, Change in Control Transactions Description | 'the holders of the Convertible Notes and Convertible Warrants will be entitled to (i) receive upon conversion or exercise the same kind and amount of securities, cash or property which the holders would have received had they converted or exercised their Convertible Notes or Convertible Warrants, as applicable, immediately prior to such transaction; and (ii) have their securities assumed by the surviving entity. In addition, if such a transaction involves cash consideration, is a going private transaction, or involves securities not listed on the NYSE or NASDAQ, the holders of the Convertible Warrants will be entitled to have their Convertible Warrants repurchased at a calculated Black-Scholes value of such Convertible Warrants at any time within 60 days after the transaction. Subject to limited exceptions, the Company will not permit the conversion of the Convertible Notes or exercise of the Convertible Warrants of any Purchaser, if after such conversion or exercise such Purchaser would beneficially own more than 4.99% of the outstanding shares of Common Stock subject to adjustment of 9.99% with 60 days' notice by the Purchasers. | ' | ' | ' | ' | ' | ' | ' |
Line of Credit Facility, Maximum Borrowing Capacity | ' | ' | ' | ' | ' | 15,000,000 | ' | ' |
Line Of Credit Advance Transaction One | ' | ' | ' | ' | ' | 7,500,000 | ' | ' |
Line Of Credit, Availability Of Second Advance, Dependent Upon Achieving Gross Commercial Revenue | 5,000,000 | ' | ' | ' | ' | 2,500,000 | ' | ' |
Amount To Be Achieved In Gross Commercial Revenue For Availability Of Second Advance | ' | ' | ' | ' | ' | 6,000,000 | ' | ' |
Amount To Be Achieved In Gross Commercial Revenue For Availability Of Third Advance | 7,000,000 | ' | ' | ' | ' | ' | ' | ' |
Line of Credit Facility, Expiration Period | '39 months | ' | ' | ' | ' | ' | ' | ' |
Line of Credit Facility, Interest Rate Description | 'The Credit Facility has a term of 39 months and accrues interest at a rate equal to the prime rate plus 7.75% (with the prime rate subject to a floor of 4.75%), calculated on an actual/360 basis and payable monthly in arrears. Amounts outstanding during an event of default accrue interest at a rate of 3% in excess of the above rate, and past due amounts are subject to a 5% late charge. Outstanding principal will amortize in the 30-month period preceding maturity, payable in equal installments of principal and interest (subject to recalculation upon a change in prime rates). | ' | ' | ' | ' | ' | ' | ' |
Line Of Credit Facility Commitment Fee Percentage Description | 'Any advance may be prepaid in whole or in part at any time, subject to a prepayment fee of 1-2% if prepaid more than one year after closing. In addition, a fee equal to 3.50% of all advances made under the Credit Facility will be payable upon the final principal payment or prepayment in full of the advances. The Credit Facility is secured by a lien on substantially all of our assets. | ' | ' | ' | ' | ' | ' | ' |
Amount To Be Raised In Capital To Receive Third Advance | 15,000,000 | ' | ' | ' | ' | ' | ' | ' |
Value Of Common Shares Exercisable | ' | ' | ' | ' | ' | ' | 900,000 | 300,000 |
Common Stock Exercise Price | $1.02 | ' | ' | ' | ' | ' | ' | ' |
Aggregate Common Shares Exercisable limit | 1,176,471 | ' | ' | ' | ' | ' | ' | ' |
Warrant Liability, Common Stock, Shares | 882,353 | ' | ' | ' | ' | ' | ' | ' |
Warrant Liability, Fair Value | $700,000 | ' | ' | ' | ' | ' | ' | ' |
Debt Instrument, Debt Default, Description of Violation or Event of Default | 'The events of default under the Loan Agreement include, without limitation, (1) a material adverse change in our ability to perform our obligations under the Loan Agreement, or in the value of our collateral, and (2) an event of default under any other of our indebtedness in excess of $150,000. If an event of default occurs, Hercules is entitled to take enforcement action, including acceleration of amounts due under the Loan Agreement. | ' | ' | ' | ' | ' | ' | ' |
Fair Value Measurements, Valuation Processes, Description | ' | ' | ' | ' | 'The valuation assumptions are based on a the Convertible Debenture face amount of $10.0 million, cash coupon rate of 6%, time to maturity of 2.8 years, and a yield bond rate of 30%. | ' | ' | ' |
Debt Instrument, Maturity Date, Description | ' | ' | ' | ' | '2.8 years | ' | ' | ' |
Stockholders_Equity_Details_Te
Stockholders' Equity (Details Textual) (USD $) | 3 Months Ended | 6 Months Ended | 12 Months Ended |
In Millions, except Share data, unless otherwise specified | Jun. 30, 2014 | Jun. 30, 2014 | Dec. 31, 2013 |
Class of Stock [Line Items] | ' | ' | ' |
Aggregate Common Shares Exercisable limit | ' | 1,176,471 | ' |
Common Stock, Shares, Issued | 48,659,826 | 48,659,826 | 46,156,921 |
Common Stock, Shares, Outstanding | 48,659,826 | 48,659,826 | 46,156,921 |
Common Stock, Shares Authorized | 150,000,000 | 150,000,000 | 75,000,000 |
Preferred Stock, Shares Authorized | 5,000,000 | 5,000,000 | 5,000,000 |
Preferred Stock, Par or Stated Value Per Share | $0.00 | $0.00 | $0.00 |
Common Stock, Par or Stated Value Per Share | $0.00 | $0.00 | $0.00 |
Shares Authorized | 155,000,000 | 155,000,000 | 80,000,000 |
Minimum Bid Price of Common Stock | $1 | $1 | ' |
NASDAQ Listing Rule Description | ' | 'The NASDAQ OMX Group (“NASDAQ”) indicating that the bid price of our Common Stock for the last 30 consecutive business days had closed below the minimum $1.00 per share required for continued listing under NASDAQ Listing Rule 5450(a)(1). The notification letter has no effect on the listing of Common Stock at this time, which will continue to trade on the NASDAQ Global Market under the symbol “BAXS”. We have been provided a period of 180 calendar days, or until December 1, 2014, to regain compliance. The letter states that the NASDAQ staff will provide written notification that we have regained compliance if at any time before December 1, 2014, the bid price of Common Stock closes at $1.00 per share or more for a minimum of 10 consecutive business days. In the event we do not regain compliance within the 180-day grace period, we may be eligible for additional time if we meet the continued listing requirement for market value of publicly held shares and all other initial listing standards, with the exception of the bid price requirement, and provide written notice to NASDAQ of our intent to cure the deficiency by effecting a reverse stock split, if necessary. If we are able to meet these requirements, the NASDAQ staff will inform us that we have been granted an additional 180 calendar days. If we fail to regain compliance after the second 180-day grace period, our Common Stock may be subject to delisting by NASDAQ. We intend to actively monitor the bid price for Common Stock and will consider available options to resolve the deficiency and regain compliance with the NASDAQ minimum bid price requirement. | ' |
Stock Purchase Agreement Modification Description | ' | '(i) increase the number of shares of Common Stock that we have the right to sell to Lincoln Park from 100,000 shares to 125,000 shares as often as every business day, which amount may be further increased in accordance with the Purchase Agreement, (ii) increase the aggregate amount of Common Stock that we have the right, subject to certain limitations, to direct Lincoln Park to purchase over the 36-month term of the Purchase Agreement from $7.0 million to $8.2 million, and (iii) decrease the floor closing price that the Common Stock must trade above in order for sales to be made to Lincoln Park under the Purchase Agreement from $1.00 to $0.50 per share. | ' |
Lincoln Park Capital Fund, LLC [Member] | ' | ' | ' |
Class of Stock [Line Items] | ' | ' | ' |
Right To Sell Common Stock, Value, As Per Purchase Agreement | ' | ' | $7 |
Right To Sell Common Stock, Shares, As Per Purchase Agreement | ' | 657,895 | 100,000 |
Commitment Shares Issued | ' | ' | 182,609 |
Stock Issuable On Prorata Basis | 210,433 | 210,433 | 60,870 |
Sale Of Common Stock | 700,000 | 2,400,000 | ' |
Gross Proceeds From Sale Of Common Stock | $0.70 | $2.50 | ' |
Stock_Incentive_Plans_and_Stoc2
Stock Incentive Plans and Stock-Based Compensation (Details) (USD $) | 6 Months Ended | 12 Months Ended |
In Thousands, except Share data, unless otherwise specified | Jun. 30, 2014 | Dec. 31, 2013 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' |
Number of shares outstanding | 3,985,590 | ' |
Number of shares options granted | 1,294,000 | ' |
Number of shares options exercised | -2,000 | ' |
Number of shares options expired | -174,701 | ' |
Number of shares options forfeited | -694,925 | ' |
Number of shares outstanding | 4,407,964 | 3,985,590 |
Number of shares options exercisable | 2,199,577 | ' |
Number of shares options vested and expected to vest | 4,188,471 | ' |
Weighted average exercise price outstanding | $3.31 | ' |
Weighted average exercise price granted | $0.78 | ' |
Weighted average exercise price exercised | $0.28 | ' |
Weighted average exercise price expired | $5.32 | ' |
Weighted average exercise price forfeited | $1.93 | ' |
Weighted average exercise price outstanding | $2.71 | $3.31 |
Weighted average exercise price exercisable | $3.89 | ' |
Weighted average exercise price vested and expected to vest | $2.77 | ' |
Weighted average remaining contractual term outstanding | '7 years 9 months 7 days | '7 years 8 months 16 days |
Weighted average remaining contractual term granted | '9 years 10 months 2 days | ' |
Weighted average remaining contractual term exercised | '11 days | ' |
Weighted average remaining contractual term expired | '6 years 2 months 26 days | ' |
Weighted average remaining contractual term exercisable | '6 years 4 months 6 days | ' |
Weighted average remaining contractual term vested and expected | '7 years 8 months 8 days | ' |
Aggregate intrinsic value outstanding | $11,125 | ' |
Aggregate intrinsic value exercised | 856 | ' |
Aggregate intrinsic value outstanding | 3,855 | 11,125 |
Aggregate intrinsic value exercisable | 3,855 | ' |
Aggregate intrinsic value vested and expected | $3,855 | ' |
Stock_Incentive_Plans_and_Stoc3
Stock Incentive Plans and Stock-Based Compensation (Details 1) | 6 Months Ended |
Jun. 30, 2014 | |
Share Based Compensation Arrangement By Share Based Payment Award Fair Value Assumptions Risk Free Interest Rate [Line Items] | ' |
Risk-free interest rate | 1.90% |
Expected term | '6 years |
Expected volatility | 63.40% |
Expected dividend yield | 0.00% |
Stock_Incentive_Plans_and_Stoc4
Stock Incentive Plans and Stock-Based Compensation (Details 2) (Restricted Stock Units (RSUs) [Member]) | 6 Months Ended |
Jun. 30, 2014 | |
Restricted Stock Units (RSUs) [Member] | ' |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' |
Outstanding as of December 31, 2013 | 0 |
Granted | 3,055,997 |
Forfeited | -865,778 |
Outstanding as of June 30, 2014 | 2,190,219 |
Stock_Incentive_Plans_and_Stoc5
Stock Incentive Plans and Stock-Based Compensation (Details Textual) (USD $) | 3 Months Ended | 6 Months Ended | ||
In Thousands, except Share data, unless otherwise specified | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 |
Stock Incentive Plans And Stock Based Compensation [Line Items] | ' | ' | ' | ' |
Share-based Compensation, Total | $300 | $300 | $669 | $620 |
Closing Price Of Common Stock | $0.57 | ' | $0.57 | ' |
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Rights | ' | ' | 'A portion of the RSU awards is subject to time-based vesting and a portion of the RSU awards is subject to performance-based vesting as outlined below: 75% is time-based (25% vests on first anniversary of grant date, 37.5% vests on second and third anniversaries of grant date); 25% is performance-based (100% vests upon the achievement of a 30% increase in Company revenue year-over-year for two successive quarters by the end of fiscal 2016). | ' |
Restricted Stock Units (RSUs) [Member] | ' | ' | ' | ' |
Stock Incentive Plans And Stock Based Compensation [Line Items] | ' | ' | ' | ' |
Share Based Compensation Arrangement By Share Based Payment Award Bases For Shares Awarded | $3 | ' | $3 | ' |
Stock Incentive Plan 2007 [Member] | ' | ' | ' | ' |
Stock Incentive Plans And Stock Based Compensation [Line Items] | ' | ' | ' | ' |
Share Based Compensation Arrangement By Share Based Payment Award, Maximum Number Of Shares Available Under Plan | 7,600,000 | ' | 7,600,000 | ' |
Other_Condensed_Consolidated_B2
Other Condensed Consolidated Balance Sheet Information (Details) (USD $) | Jun. 30, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Property, Plant and Equipment [Line Items] | ' | ' |
Furniture and fixtures | $494 | $484 |
Equipment | 7,127 | 6,459 |
Computer software | 501 | 496 |
Leasehold improvements | 1,080 | 1,080 |
Capital leases of buildings | 51 | 51 |
Construction in process | 32 | 0 |
Property, Plant and Equipment, Gross, Total | 9,285 | 8,570 |
Less: accumulated depreciation and amortization | -6,711 | -5,523 |
Property, Plant and Equipment, Net, Total | $2,574 | $3,047 |
Other_Condensed_Consolidated_B3
Other Condensed Consolidated Balance Sheet Information (Details 1) (USD $) | Jun. 30, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Accrued Expenses And Other Liabilities [Line Items] | ' | ' |
Accrued payroll, bonuses, and employee benefits | $1,738 | $2,343 |
Legal and professional fees | 390 | 638 |
Interest payable | 209 | 100 |
Royalties | 206 | 243 |
Business taxes and licenses | 92 | 122 |
Travel and entertainment | 359 | 48 |
Other | 114 | 99 |
Total accrued expenses | $3,108 | $3,593 |